Illinois Attorney General Kwame Raoul and five other attorneys general have asked supermarket chain Albertson's to delay paying nearly $4 billion to shareholders until the group can complete a review of Albertson's proposed merger with Kroger.
Kroger, the nation's largest grocery store chain and owner of Mariano's, earlier this month announced an agreement to buy Albertsons, the country's second largest operator of supermarkets and owner of Jewel Osco, for $24.6 billion.
Albertsons announced a “special dividend” to be paid to shareholders Nov. 7 at $6.85 per share, which would total nearly $4 billion, according to a statement from Raoul's office.
In an appearance on CNBC, Washington D.C. Attorney General Karl Racine, who is leading the coalition, said while the dividend could be valid, it could amount to a massive improper giveaway to shareholders.
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The attorneys general sent a letter to both Kroger and Albertsons, voicing concerns that the dividend risks limiting Albertsons' ability to operate and properly compete with Kroger, which they said could seriously impact consumers, workers and the industry as a whole.
The acquisition as a whole, Raoul argued, could severely reduce competition, lead to higher food prices at a time when families are already struggling and worsen food security impacting low-income families.
"The proposed merger’s implications do not end with the consumer: the Parties’ merger announcement noted that together, Kroger and Albertsons have more than 710,000 employees in 4,996 stores across 48 states and the
District of Columbia," the letter from the attorneys general read, in part. "Thus, if the proposed merger has anticompetitive effects, nearly every corner of this country will feel them."
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Along with Raoul, bipartisan attorneys general of Arizona, California, the District of Columbia, Idaho and Washington have signed the letter.
